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Editorial:
Unfortunate side-effects of austerity
Since the economy is not doing very well, the Presidential Office and Executive
Yuan have announced the cancelation of annual banquets that are held for
employees prior to the Lunar New Year. Other companies have also decided either
to scale down their celebrations or simply not to hold the events at all this
year.
Government officials said that canceling the banquets was to help reduce
government expenditure. However, the move is also believed to be a reflection of
current public opinion and social perceptions during a difficult time.
As for local businesses, many of those still wanting to hold annual banquets
have decided not to have large feasts this year or invite pop stars to entertain
their employees.
The annual banquets, known as wei ya (§À¤ú) parties, are traditionally held ahead
of the Lunar New Year as a way for bosses to show their appreciation for
employees¡¦ hard work throughout the year and to offer an opportunity for
companies to improve relationships between employees and employers.
The announcements by the Presidential Office and Executive Yuan have caught
other government agencies by surprise, even though they said they did not expect
other public agencies to follow suit. Some ministries have decided to scrap the
events, while others are struggling to decide whether they should disappoint
their employees or consider alternative ways to appropriately thank them.
This public sector austerity measure may be seen as politically correct, but
could have negative consequences economically. It has set an example for the
private sector to cut spending on their year-end banquets and celebrations, but
this could have knock-on-effects for the nation¡¦s economy, with weakened
aggregate consumption impacting upon domestic demand in the short term,
especially for restaurants and catering operators.
For example, a restaurant association in Taipei reportedly said last week that
this year¡¦s reservations for year-end banquets had dropped by as much as 30 to
40 percent compared with the previous year. The government may not have
anticipated this impact.
It is unknown whether the public sector¡¦s austerity measure will extend to the
spring banquets which are held after the Lunar New Year for bosses to boost
employee morale and encourage staff to achieve the new year¡¦s business targets.
If most government agencies opt not to hold spring banquets and local companies
also follow this pattern, it could have further negative impacts on business
growth and job creation across the nation, causing more challenges for the
nation¡¦s economic recovery.
There have been mixed reactions toward the government¡¦s decision. Some have
praised it for taking into account the nation¡¦s social and economic situation,
while others have lamented the move for its bad timing and economic impact.
However, rather than dwelling on whether the government should take the lead in
cutting back unnecessary spending, people should consider that the money saved
from such cancelations is nothing compared with the NT$37 billion (US$1.27
billion) cut from the national budget for this year, which was approved by the
legislature last week.
The action could instead be used as an opportunity to consider the roots of wei
ya parties in Taiwanese culture ¡V¡V for people in an organization to get together
to show mutual respect and appreciation for each other as the current lunar
year¡¦s end approaches.
We should conserve the social value and cultural significance of these parties,
but could think about appropriate ways in which they could be celebrated;
whether they should come in the form of banquets, cultural performances or
charity activities.
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